There are an awful lot of expressions in tax that try to give some sense, maybe in two words, as you have with exempt surplus and other things, and to compress 36 pages of legislation down.
For exempt surplus, the model probably has a presumption that rates are reasonably equivalent. The model says that if Canada grants another country first right of taxation, then there won't be a second incidence of tax when that income comes back. You can debate whether that has merit from an academic perspective, but it's an approach countries take. They cede taxation to the other country, and if it's subject to tax, then they say the residual can come home without tax. There is an option of saying the residual can come home with tax, and we'll grant you foreign tax credit, but those are competing approaches from an academic perspective, and a collection of economists might tell you which way is better.
I'm sorry, I didn't mean to choke off your meter. The term “exempt surplus” is an expression that means a Canadian company can recover profits earned by its subsidiaries--referred to as affiliates--in foreign countries, bring them back, and not have a second incidence of tax until they pay it out to their shareholders. When they pay it out to their shareholders--to you and me, if we had shares--then there's an incidence of tax at that point in time.
It's fairly complicated. It's the field of economists.